The court's decision established that the CLB was justified in refusing to frame the preliminary issue of limitation and/or delay and laches and that the petition could not be dismissed at the threshold on the principles akin to Order 7 Rule 11 (d) of the Code of Civil Procedure.

1. All these Company Appeals involve common and connected questions of law and fact. As such, they are being disposed of by this common judgment.

2. These four appeals represent two sets of cross appeals, one each by, Auduth Timblo (AT) being Company Appeal Nos. 1/2013 and 2/2013 and the other by his brother, Dilip Timblo (DT) being Company Appeal Nos. 7/2013 and 8/2013. It would be sufficient to set out the facts in Company Appeal No. 2/2013.

Background Facts:

3. The brief facts are that Sociedade de Fomento Industrial Private Limited (SFIPL), (Company, for short) is a Company registered under the Companies Act, 1956 (the Act, for short) with authorised share capital of Rs.1,00,00,000/-(Rupees One Crore only), divided into 50,000 equity shares of Rs.100/-each and 50,000 unclassified shares of Rs.100/-each. The paid up share capital is Rs.25,00,000/-(Rupees Twenty-Five Lakhs), divided into 25,000 equity shares of Rs.100/-each. The Company is in the business of extraction and sale of iron ore. The Company was incorporated by late Modu Timblo (MT), who was said to be a pioneer in Mining Industries in Goa. Modu Timblo died on 08.01.1993. Smt. Sushilabai Modu Timblo (ST) is the widow of MT, while AT, DT and Prashant Timblo (PT) are the sons of MT. The initial share holding pattern of the Company was as under:

Name of Shareholders

No. of equity shares of Rs.100/- each Percentage of holding in paid up equity share capital

of the Respondent No.1 Company

Late Modu Timblo 10,000

40%

Auduth Timblo 5,000 20%

Dilip Timblo 5,000 20%

Prashant 5,000 20%

4. DT presently holds 6,666 equity shares of the Company. DT had filed a Company Petition No. 7/2012 on 14.02.2012, before the Company Law Board (CLB), Western Region Bench at Mumbai, under Section 111(4) of the Act, for rectification of the share holders register. He further prayed for a direction to the Company to record 10,000 shares constituting the part of inheritable estate of MT in the Company, jointly in the name of ST, AT, PT and DT (original petitioner).

5. That, Auduth Timblo (AT) filed an application dated 30.08.2012 being Company Application No. 147/2012 in Company Petition No. 7/2012 with the following material prayers:

(a) That the Hon'ble Company Law Board be pleased to frame a preliminary issue, as to whether the present Company Petition is barred by the law of limitation, or, in any case, is not maintainable as being barred by delay and laches and take on record this present application and set a suitable date for the final hearing and disposal of the same.

(b) Company Petition No. 7 of 2012 be dismissed with Costs.

(c) That, in the alternative to prayer (b) above, the Hon'ble Company Law Board be pleased to dismiss the present Company Petition, as being not maintainable on the ground of delay and laches.

6. It was contended that vide clause 4 of the Family Arrangement and Settlement dated 18.11.1994, the parties had agreed on division of shares and the percentage of shareholding of each party, as per the arrangement set out therein, as under:

“The shareholding of the family consisting of ST, AT, DT and PT in the companies, as per the list annexed hereto, shall be brought on par with as it exists in SFI i.e. ST 20% and AT, DT and PT 26.2/3% each.”

7. Thereafter, the Shareholders Agreement dated 18.11.1994 was executed between the Company and AT, DT, ST and PT. The relevant clause is as under:

The Share holding of each party is in the following proportion:

ST - 5000

AT - 6667

DT - 6666

PT - 6667

25,000

8. It was contended that the said transfer of shares were reflected in the Register of Members of the Company as on 05.04.2005. The petitioner (DT) became aware of the transmission and transfer of shares on 11.04.2005, when he was given a copy of Agreement dated 05.04.2005, before the CLB, in other proceedings between the parties. This is evident from the correspondence annexed to the petition, as also from the contents of the petition. It was also contended that D